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AIM Directors' Remuneration Report 2018

08 June 2018

AIM Directors’ Remuneration Increases Faster Than For Employees But Varies Significantly Between Industry Sectors

In the light of recent shareholder revolts on directors pay at the likes of Cineworld, Unilever, Persimmon and Melrose Industries, getting executive remuneration right is becoming increasingly important. BDO’s latest research into remuneration of directors of AIM listed companies will assist remuneration committees in benchmarking their board remuneration compared to their peers.

Our 2018 report highlights some fascinating trends from the previous year. Overall AIM director remuneration increased faster during 2016/17 than the average annual UK rate of salary growth but with CFOs increasing faster than their CEOs.

The median CEO remuneration for 2016/17 was £248k, a 2.9% rise from a year before which compares to the average annual UK salary growth of 2.2% as at the end of the third quarter of 2017. However, the median CFO remuneration increased by 25% to £217k, representing 88% of the CEO package compared to 70% the previous year, which by any measure is a significant increase.

There was significant variation across different industry sectors, with retail again leading the way both in terms of overall remuneration size and in the rate of growth. Although this may be a surprise, AIM does have a number of large online retailers such as Asos and boohoo.com who are performing better than most of their high street peers. This year on year remuneration growth is due to increases in base salary, a higher proportion of directors earning a bonus and some considerable one off benefits resulting from deal-related payments.

The average non-executive director earned £33k, the same as the year before, and other executive directors saw an increase of about 7% in their total median remuneration.

We hope you find this report helpful and encourage you to discuss any remuneration or general board issues you have with us.